Abstract

The present article offers an empirical assessment of the degree and the
structure of price dependence between wholesale and retail market levels in
the U.S. beef industry, while accounting for product differentiation. This is
pursued using the statistical tool of copulas and monthly rates of price changes
for different cuts and quality grades of the beef product for the time period
2002–2016. Six wholesale–retail pairs were formed based on different cuts and
quality grades. The empirical results suggest that prices at retail level respond
differently to extreme negative and positive wholesale price shocks. More
specifically, extreme price increases at the wholesale level are transmitted to
the retail level in five out of six pairs whereas extreme price decreases are not
passed from the wholesale to the retail market level in five out of six pairs.
Based on these findings, there is evidence of asymmetric price relationships
between wholesale–retail market levels in the U.S. beef marketing channel,
when quality differences in cuts and grades is considered.

Item Type:

MPRA Paper

Original Title:

Vertical price relationships between different cuts and quality grades in the U.S. beef marketing channel: a wholesale-retail analysis

English Title:

Vertical price relationships between different cuts and quality grades in the U.S. beef marketing channel: a wholesale-retail analysis